Athens to offer creditors bailout extension

Greece is due to unveil an official proposal with the aim of saving the talks on its bailout that seem to be on the verge of breaking down.

According to Greek government spokesman, Gavriil Sakellaridis, the plan would involve extending Athens’ 240-billion-euro (USD 270-billion) international loan deal but without the harsh austerity measures imposed on the country. The proposal is set to be submitted on Thursday.

“We believe the terms of the bailout cannot continue by any means,” Sakellaridis said.

Greek public television also said the country will send a letter to the head of the Eurogroup, Jeroen Dijsselbloem, to demand a six-month extension on its European loan deal while avoiding the duties of a full-blown bailout.

“We should extend the credit program by a few months to have enough stability so that we can negotiate a new agreement between Greece and Europe,” Greek Finance Minister Yanis Varoufakis told Germany’s ZDF channel.

The government of Premier Alexis Tspiras has expressed its disapproval of any extension of the bailout agreements that contain the harsh terms under which the loans were handed.

Greece’s economic crisis has deteriorated by the deep cuts to spending and incomes and sent the unemployment rate above 25 percent.

European nations’ reaction

The development comes as EU paymaster Germany said on Wednesday that any extension of financial aid to Greece beyond February 2015 “inextricably” depends on Athens implementing reforms that it has agreed to under the terms of the bailout deal.

“It can’t and won’t be the case that you go for an extension without the agreed reforms,” a spokesman for Finance Minister Wolfgang Schaeuble said, adding, “Both are inextricably linked.”

Schaeuble also said Tuesday that the Greeks should face the truth that “there is no fast way” for emerging out of the country’s economic crisis.

French Finance Minister Michel Sapin, meanwhile, said Wednesday that his country wants a deal on the Greece bailout crisis by the end of the week, with Spain saying that the deal should consider “the Greeks’ vote” as well as Europe’s rules.

Brussels talks collapse

Talks between Europe and Greece aimed at reaching a new deal based on Greece’s bailout, which expires on February 28, were held in the EU’s de facto capital on Monday. However, they fell through after Athens rejected the EU’s proposal.

Eurozone finance ministers set five conditions at their negotiations for keeping their financial support for Athens, including a pledge not to reverse previously accepted reforms.

Greece denounced the new bailout proposal as “absurd” and “unacceptable.”

Dijsselbloem said on the same day that Greece has until Friday to request an extension to the bailout.

In case no agreement is reached by February 28, eurozone governments could pressure the European Central Bank (ECB) to cut off emergency financing for Greek banks.

In 2010, Greece enforced severe budget cuts in return for its 240-billion-euro bailout from the troika of lenders — the European Commission, the International Monetary Fund (IMF) and the ECB.